Technology Monetization Nightmare - The Splinter Effect

Some people make very interesting choices. Take John Malone’s recent statement, as reported in The Financial Times Newspaper (FT.com) to swap Liberty Media’s $1.6 Billion ownership in Time Warner for AOL’s dial-up business that is valued at $1.5 Billion. The article also pointedly reminds us that the dial-up business is a declining Internet access operation. This choice may not be a bad one except surely for high-bandwidth technology vendors and content suppliers.

The choice may be the right one for Liberty Media if it knows what it is paying for in AOL’s dial-up business. It is, of course, possible that Liberty is buying AOL’s dial-up business for some inherent technology that has more profitable uses in addition to serving dial-up access users. However, it is more likely that dial-up users are the ideal target for other products and services from Liberty Media and dial-up is the right channel to get before them as they are less likely to, for example, be twittering (twitter.com) when Liberty calls. As technology has enabled more and more communication channels, it has become increasingly likely that a company and its customers are on different channels (the splintering effect) and Liberty Media’s swap is just a way to implement the old rule of marketing and sales that requires every company to “Be on the same communication channel as its customers.”

Another interesting choice is the New York Times (NYTimes.com) newspaper’s partnering with LinkedIn (Linkedin.com), the online professional network. As reported in BtoB (btobonline.com), this partnership is designed to reveal additional stories to users of the Times’ website based upon information in their LinkedIn profiles.

The hope is that the Times will use LinkedIn profiles to lengthen user visits and for monetization through targeted ads that can be shown during the lengthened user visits to the site. This monetization strategy could work if users agree to self-identify themselves via their LinkedIn profiles and the Times can charge advertisers a premium for targeted ads shown to these users. This choice may be the right one especially if the target customers are the younger consumers who get more news online and who also are primary users of LinkedIn.

Not minimizing execution issues, Liberty Media and The New York Times can meet their business goals through technology if the technology they adopt is known (to them) to be suitable for their business. If not, they may feel like Jeremy’s mom or even Jeremy in the Zits cartoon strip that ran in the Los Angeles Times (LATimes.com) newspaper on 16 August 2008:

Grand Theft:Technology’s Purpose

“This will finally force us to drive less, reduce demand and use more public transit” remarked a dear friend of mine. He was reacting to my statement that I had just paid $89 to fill-up my SAV. Everyone present who had worked in the oil, gas and energy industries quickly agreed with his opinion, while a few others expressed concern for the negative impact this high cost would have on many lives.

What’s most interesting, however, is that there was no need for any further discussion from those who saw the price increase as just another example of the demand-vs-supply principle in action while others felt the need to discuss this further mainly because lives of real people were being impacted. Soon the two groups were separately discussing solutions to the high cost of a gallon of gas but they had one thing in common. They all agreed that ‘technology’ was a big part of the solution while still disagreeing on what the end goal or purpose should be.

As I left the gathering, I happened to glance at the cars in the parking lot and noticed a hybrid owned by a supporter of the supply-vs-demand trade off and realized that the righteous debate could be bridged by focusing on technologies that made cars use gas more efficiently. This increase in efficiency would reduce both the demand and the effective cost per gallon. I have to remember to bring this up when we get together next.

This way of thinking about technology’s purpose appears to be universal. My model for it has become the coins we use as money. The ‘head’ and the ‘tail’ look in opposite directions but are held together by the edge with ridges (also know as reeds). Here is some of my thinking on how to focus technology on a purpose that solves a current problem:

• To reduce the price of a gallon of gas, let’s make gasoline usage more efficient through better engines, roads, tires etc
• To encourage the Myanmar government to be less insular, let’s find a way for the Burmese people to access the Internet from the legacy cell phones already in their possession
• To ease the global food crisis, let’s push for local agricultural self-sufficiency through fertilizer technology

What purpose do you recommend for technology?

Personal Cultural Identity Drives Technology Reach

You would be right in naming your native city or any city in the world in response to my question “Can you tell me where the following scenes are unfolding: a jogger with the white tell-tale wires hanging from her ears; a suit leaning over a laptop in an airport lounge; a harried businessman talking loudly on a cell phone while pacing outside a downtown skyscraper; a user thumbing the blackberry keypad while waiting to enter a theater; a family laughing loudly watching a show on TV?” You are right because personal technologies do penetrate societies and cultures like nothing else can.

You would also be right in your answers to the follow-up questions: “What music is she listening to; what language are they speaking; what clothes are they wearing; what’s the color of their skin, how unrestrained are their emotional expressions?” You are right because these personal technologies have penetrated different societies and cultures while reinforcing the differences in identity of the world’s people.

This push for identity is even seen when technology seems to force language conformance and cultural similarity. An example is the widespread use of the ubiquitous QWERTY English language keyboard in favor of local language keyboards. The solution that individuals have devised is to use phonetics of the English language to sound the words of their preferred tongue in written communications like emails and scripts. The cultural acronyms and emoticons (for laughter, sarcasm and astonishment) so beloved by inhabitants of the net and phone messaging worlds are only the latest example of this preference for identity.

It’s easier for purveyors of consumer products like Apple, Adidas, Intel and Toyota to navigate on the merits of their technology offering alone. It’s quite a different endeavor for content owners like Disney and Sony who must choose what, if any, and how much cultural localization and reflection their technology offerings will contain and then arrange the rest of their enterprise to capitalize from these technologies.

Technology is a catalyst for improving life

The wisdom in “Beauty is in the eyes of the beholder” also applies to “Technology is in the experience of the recipient.” Arthur C. Clark maintained that “Technology is indistinguishable from magic.” R. Buckminster Fuller’s position was that “Humanity is acquiring all the right technology for all the wrong reasons”. Albert Einstein said that “Technology has exceeded our humanity.” Generation X and Y express their opinion through the words “Technology is cool.” Like beauty, technology has as many meanings as there are lives on this earth.

This diversity in meaning has existed forever for every thing that has improved human life. While many early scriptures presented “Fire” as a representation of the Almighty or as a gift from the Almighty to mankind, mankind values fire for the heat it provides and the creativity it has unleashed. Over the years, we have figured out how to use fire for comfort, for increasing our food supply by cooking before eating, for keeping predators at bay and even for disposing all traces of what we dislike and like. Fire was a hot technology many eons ago but is not on our technology radar today because its benefits are widely available and as a result, our creative attention has shifted away from fire.

Life, however, poses different challenges in different parts of the world. In much of the developed world, electricity has almost gained the status of a human right. In the developing and rural world where electricity is a rare and uncertain commodity but whose potential to improve life is accepted, creative minds are focused on electrification technologies. In a similar vein, as technologies that defined the manufacturing age loose attention of minds in the West, they are front-and-center in local creative minds in China and India because of their potential to improve local lives through industrialization.

Trust is key for Technology Monetization

We humans are a careful and trusting but community-loving lot. We are willing to share our wants with others we trust and, if we can do so anonymously, we are willing to share with Madison Avenue.

While it is against our nature to hang a public notice outside our home, just look at what we are doing on the Internet. We search on the Internet believing we are anonymous when in fact the search provider knows what we are searching for and is storing that information. Also, believing that everything we type and upload is protected we share our most private details and desires with friends on a Social Networking website that we trust when it promises to follow our wishes regarding community and privacy.

Simply stated, we are volunteering all the very same information that Madison Avenue wants to create a timely snapshot of each of us. We are the trusting type and believe that the recipients of our trust do care enough to deserve our trust.

Facebook’s recent adventure with its Beacon Project is an example of how we react if trust is violated. Facebook’s attempt to monetize its technology investments by sharing online purchase histories without maintaining individual anonymity infuriated everyone including persons who received histories.

On the other hand, Google is successful at continuing to cultivate our confidence that every search is anonymous and has cleverly leveraged our search topic as fodder for Madison Avenue’s hunger. Such creative middlemen with squeaky-clean reputations are worth their weight in gold to Madison Avenue as evidenced by Google’s revenues. It is no stretch of the imagination that Google’s revenues are expected to continue to grow as it enters new markets, if Google's behaviour continues to show that Google cares about how it uses personal information.

In short, Google has figured out that trust (how personal information is used) is fundamental to monetizing investments in technology. Is it any wonder then that Microsoft now wants to buy Yahoo for a princely sum as the only way to monetize Internet investments?